VA Raw Land Loans

hobbit · Post by **hobbit** » November 30th, 2006, 5:22 pm

Have any of you troglodites ever gotten a VA raw land loan? I'm looking at a sweet little 40 acre parcel in Eastern Oregon, way out in the outback. My mortgage broker just sent me this e-mail:

Tom,

I found out that a regular VA loan will not lend on raw land. It requires that there is a building that is in good condition. I did hear about something called a VA board that might lend on raw land. For example, Texas has a VA board that would lend on raw land. I have made a few phone calls to see if Oregon has one and so far I have not heard back from anyone. I will keep trying. The interest rates for an A borrower is competitive and right now are in the 6% (mid) up to very low 7% depending on the situation.

As I said above, I will continue to try to find out something about a VA board for Oregon. If there is anything else, please feel free to call. I am also happy to answer questions or at least try to find answers.

THANKS

Horned Toad · Post by **Horned Toad** » November 30th, 2006, 8:18 pm

I would go with a any regualr borrow that will lend on raw land, they are not many from what I have been finding out. If its a good piece of land for a good price get it tied up in escrow anyway possible.

Nomad · Post by **Nomad** » December 1st, 2006, 6:53 am

Is the VA loan based off of one's credit rating or is it equal for all people who would like to use that option?

Darksaga · Post by **Darksaga** » December 2nd, 2006, 12:44 am

I know the VA had a raw land loan but I will need to do some research to see if it is still in effect and what you would need to show.

hobbit · Post by **hobbit** » December 2nd, 2006, 1:00 am

Matador275 wrote:Is the VA loan based off of one's credit rating or is it equal for all people who would like to use that option?

All the VA does is guarantee the loan. They don't make loans. Conventional banks make the mortgage loans guaranteed by the VA. You still have to qualify for a loan like anybody else. In other words, your credit history, credit score, income, debt ratios, etc. all still come into play. The beauty of a VA guaranteed loan though, is that they guarantee 100% of the purchase price, so you don't have to put any money down. I've had three previous VA loans and paid them all off early. Those were all houses though. Raw land is a different animal.

In a nutshell, you can figure out if you're going to qualify for a VA home loan by possessing the following characteristics:

A clean credit history.
Steady employment or at least steady income.
A good credit score.
A debt ratio of no more than 41%

In other words, if your household income is net $4000 per month, all of your revolving credit obligations (credit card debt, car loans, and mortgage payment) cannot exceed 41% of your monthly net income. In this example cited, with a net monthly income of $4000, your debt load could not exceed $1640 a month total. The less debt you have going in, the more money you can borrow for a home.
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hobbit · Post by **hobbit** » December 2nd, 2006, 1:01 am

BTW The Oregon Department of Veterans Affairs does have a one-time deal for you younger guys. I've been out of the service too long to take advantage of it. They'll guarantee up to 40% or a maximum of $20,000 on some raw land loans.

Rangerguru · Post by **Rangerguru** » December 2nd, 2006, 7:54 pm

If you shop around you can get just as good a deal as a VA loan without all the headache of dealing with them, although as of right now I'm pretty sure that they won't touch a loan on just land. I just bought a house with 24 acres and they wouldn't count all of it towards the value of my house. About the only thing that's good about a VA loan is that if you're disabled, you don't have to pay funding fees, and if the intrest rates drop you can refinance at the lower rate without paying closing cost. I hope this helps